Flows

In Wednesday’s trading for flows on the first official day of hurricane season, prices gave back part of the big gains they had scored Tuesday. A 3.1-cent prior-day screen loss (which occurred after the cessation of Tuesday’s cash trading, during which futures had been in positive territory) and minor losses of cooling load in some areas were chiefly responsible for the declines.

Thursday’s trading for end-of-March flows was a near-repeat of the day before — generally modest price movement both up and down, with South and East Texas joining Northeast citygates in seeing much of the softening and gains being recorded at almost all points in the Midcontinent and West.

Vector Pipeline LP has filed an application to construct new compressor stations to accommodate a concurrent request to increase flows at its existing U.S.-Canadian border facilities.

Enbridge reported Tuesday that it expects total gas flows on its five offshore Gulf of Mexico pipeline corridors to come close to pre-Hurricane Katrina levels of 2.7 Bcf/d by the end of the year, compared to only about 600 MMcf/d Tuesday (200 MMcf/d of which is from storage on Destin).

Gulf Coast gas production barely budged Tuesday, according to scheduled gas flows on the region’s major pipelines, Golden, CO-based consulting firm Bentek Energy reported. Scheduled gas production onshore and offshore Texas and Louisiana was even slightly lower on Tuesday than on Monday — 3,749 MMcf/d compared to 3,888 MMcf/d. That’s down from a pre-Katrina level of 13,820 MMcf/d, Bentek said.

There are growing market concerns about widening and volatile Midcontinent basis and the likelihood that it will get worse as more gas flows East from the Rockies. The situation was largely created by unexpected production growth (or absence of declines) in Midcontinent producing basins and pipeline constraints downstream of the new Cheyenne Plains pipeline system, according to data from Denver-based consulting firm Bentek Energy. Other events on the horizon could make it even worse.

Buoyed by Tuesday’s expiration-day screen spike of 32.4 cents and almost nothing else, prices for end-of-March flows saw substantial gains Wednesday. Increases were fairly consistent and spread evenly through all market areas in ranging from a little less than 20 cents to nearly 35 cents in nearly all cases (the exception was a rise of a little more than a dime by OGT in the Midcontinent).

The final quarter of 2004 should give U.S. oil and natural gas companies enough free cash flows and opportunities to fortify balance sheets and address operational deficiencies, according to a report issued Wednesday by Standard & Poor’s Ratings Services (S&P).

The final quarter of 2004 should give U.S. oil and natural gas companies enough free cash flows and opportunities to fortify balance sheets and address operational deficiencies, according to a report issued Wednesday by Standard & Poor’s Ratings Services (S&P).